Stock Strategist

Productive Pipeline Positions BioMarin for Success

Karen Andersen, CFA

 BioMarin Pharmaceutical (BMRN) is amassing a portfolio of genetic disease therapeutics, making historical comparisons with Genzyme (now part of Sanofi (SNY)) difficult to avoid. Commercialization and research and development expenses have kept BioMarin in the red, but we’re confident in the profit-generating power of its rare-disease treatments, and we expect that the non-GAAP profitability of 2017 will be sustainable. With a deep in-house pipeline and the ability to supplement growth with strategic acquisitions, BioMarin is in a strong position.

BioMarin’s life-saving therapies may serve only a few thousand patients globally, but with six-figure price tags on most products and high barriers to entry, we see this as a very attractive marketplace. Genzyme and BioMarin formed a 50/50 joint venture to market BioMarin’s first drug, Aldurazyme, for the treatment of mucopolysaccharidosis I, or MPS I. BioMarin’s MPS VI drug, Naglazyme, is maturing but still seeing solid growth due to use in emerging markets like Brazil and higher (more expensive) dosing as young patients mature; we think peak sales will surpass $400 million. BioMarin is also well positioned to treat the entire spectrum of patients with phenylketonuria, or PKU, one of the world’s most common metabolic disorders. Kuvan is approved to treat mild to moderate PKU, and more potent drug pegvaliase should reach the market in 2018 to serve adult patients with PKU. PKU is well diagnosed thanks to state-mandated newborn screening programs, and no alternative drug therapies exist.

Karen Andersen, CFA does not own shares in any of the securities mentioned above. Find out about Morningstar's editorial policies.